AGL $5 party, page-35

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Christos12

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06/08/21

13:44

Post #: 55086752
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Originally posted by baldynumbers: ↑

Understand what you are saying... and I agree that sentiment is massively off. But I believe their lack of investment in next gen of generation is a massive, MASSIVE fundamental flaw.

Same could be said for many other giants have been rolled by incumbents purely because their offering was out of step with the times.
Kodak
Nokia
Xerox
Blockbuster

Examples given were all market leaders who chose not to invest in/look into where technology was taking their industries. Just because AGL has existing generation, cashflow, size & market leadership doesn't mean they should have not invested in additional or newer technology assets - or informed the market on what assets they will use in the future...

As it is now - they HAD a CEO who was investing in the next generation... then new CEO (Redman) sold it all off to PowAR Co via PPAs which we all know were generously priced due a lack of foresight in where energy market pricing would go - then effectively sat on their hands and enjoyed the cash coming in from existing & aging assets. Simple economics show that for prices to remain stable: demand = supply...

IMO - AGL chose not to invest in new generation to preserve the margin on the generation that their existing fleet already had... but why not invest in new generation that takes multi years to construct??? Pumped Hydro takes at least 2+ years...even newer & more clean coal plants are multi year jobbies... AGL certainly had the cash... but now they are behind in investment and such long span constructions are hard to justify in a market with declining generation prices.

Shareholders who have faith in a company are happy to average down their holdings price per share by buying more in a falling market... WTF is AGL so reluctant to do the same thing with their generation fleet? Perhaps because they don't think they can win.

A demerger isn't going to make what AGL offer any better without direct investment... a 20% stake in PowAR Co isnt enough either... capital may be preserved eventually... but I cannot see it growing from here.

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You are 100% right. AGL was the leader in renewables 10+ years ago, now they are a bit player.
the change of strategy has been a disaster as their generation competitors such as partners group, neoen, gpg and goldwind are able to under cut them with cheaper generation technology.
And they only own 20% of powar.
They should have bought Tilt outright as they need the cheap generation from their development projects to replace the expensive coal they will shutdown.

AGL Price at posting: $7.45 Sentiment: None Disclosure: Not Held
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